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09/07/2021

Report: Quick-service restaurants create delivery-only banners

Dan Berthiaume
Senior Editor, Technology
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The new DoorDash Kitchens Full Service offering provides fast-food retailers with a hosted storefront.

A number of leading quick-service chains are reportedly launching brands that exclusively serve customers using third-party delivery platforms.

According to CNBC, fast-food restaurants are extending their presence in the burgeoning on-demand meal delivery space via subsidiaries that do not have any physical presence, but offer limited menus targeted at digital customers. Pizza, chicken wings, and hamburgers are popular items for these menus, as they are simple to prepare and easy to transport.

Orders for these virtual brands are fulfilled from existing brick-and-mortar locations of the parent company. In some respect, the virtual delivery brand trend is similar to the rapidly-growing “ghost kitchen” concept. A ghost kitchen is the foodservice equivalent of a dark store – a location that prepares food for delivery, without providing dine-in service.

[Read more: Retailers extend their presence with ghost kitchens]

Although the concept has been around for several years, ghost kitchens are gaining momentum during the COVID-19 pandemic, as more consumers are turning to online delivery of prepared meals to consume at home. In addition to quick-service restaurant chains such as Wendy’s and Nathan’s Famous, retailers outside the foodservice vertical are also entering the ghost kitchen space. Notable examples include Walmart and Kroger.

As reported by CNBC, here are several examples of major quick-service chains and conglomerates operating virtual, delivery-only brands:

Applebee’s
In February 2021, Applebee’s launched a virtual chicken wing delivery brand called Cosmic Wings, in partnership with on-demand delivery platform Uber Eats. Close to 1,300 brick-and-mortar Applebee’s locations fulfill orders for Cosmic Wings’ specialty “Fried Cheetos Cheese Bites” menu items. A planned expansion of the brand to the DoorDash platform has been postponed till the fourth quarter of 2021.

Brinker International
Quick-service conglomerate Brinker International is operating virtual subsidiaries of both its Chili’s and Maggiano’s Little Italy banners. More than 1,000 Brinker locations fulfill digital orders from the Chili’s It’s Just Wings banner, and more than 250 stores are fulfilling orders from Maggiano’s Italian Classics brand.

Denny’s
Denny’s launched two virtual subsidiaries in 2021 - the Melt Down and Burger Den, earlier this year. The Melt Down offers handcrafted sandwiches built using pantry items from Denny’s, while Burger Den offers more traditional entrees from the Denny’s menu.

Burger Den’s orders are fulfilled at 1,100 Denny’s locations, and Melt Down orders are fulfilled at about 700 stores. According to information Denny’s provided to analysts, the two virtual brands deliver 3% weekly incremental sales growth.

Wingstop
In June 2021, fast-food chicken wing retailer Wingstop rolled out a new virtual banner focused on chicken thighs, Thighstop. Currently, Thighstop is available for delivery or takeout orders at 1,400 Wingstop stores across the U.S. via the DoorDash app or on the dedicated Thighstop.com site.

In late July 2021, Wingstop told analysts that it has plans for integrating Thighstop’s menu items into its Wingstop restaurants. The parent company sees Thighstop as a virtual means of expanding its menu selection beyond chicken wings.

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